'Totally false': BMW denies tariffs are driving down production as trade dispute lingers

South Carolina Democratic Party Chairman Trav Robertson said he has heard rumors about BMW moving some of its Upstate operations outside the U.S.
Kirk Brown, Anderson Independent Mail

BMW Zentrum located just off Interstate 85 near then Greenville and Spartanburg county lines is a public showcase for the German automaker's nearby massive plant. By 2018, the plant produced about 1,400 cars a day.(Photo: Courtesy of BMW Manufacturing)

BMW officials have categorically denied claims voiced at a Democratic party fundraiser that the German automaker will reduce production in Spartanburg County because of market uncertainty over tariffs.

State Democratic Party Chairman Trav Robertson made the claim in front of about 300 people at a fundraiser for congressional candidate Mary Geren Tuesday night at Clemson University's Madren Center. Geren is challenging U.S. Rep. Jeff Duncan, a Republican, this November for South Carolina's 3rd Congressional District seat.

“Just today I learned that there is a potential that BMW is talking about moving some if not a majority of its operations to South Africa and China," Robertson said Tuesday night.

Robertson's statement came amid news that state Department of Commerce Secretary Bobby Hitt had visited the BMW plant this week, as ongoing trade disputes have seen costs on commodities and components rise throughout the U.S. manufacturing supply chain since this past spring.

Hitt could not be reached for comment.

A state commerce spokeswoman said Wednesday that Hitt was busy, and she declined to answer whether the BMW meeting, which took place Monday, included a discussion about economic uncertainties and how production might be affected at the plant near Greer should tariffs continue or be increased.

She read a statement that she said came from Hitt:

"Secretary Hitt attended a meeting at BMW with a number of allies and partners to discuss the progress of last year’s expansion announcement. He routinely visits major companies around the state to evaluate needs and ensuring great communication and dialogue."

BMWs in China

BMW announced in early July that it would raise prices on South Carolina-made SUVs sold in China after the Asian nation started imposing a 40 percent tariff on all American-made cars, including South Carolina's BMWs, on July 6.

The Chinese car tariff is one piece of a larger trade war between China and the administration of President Donald Trump. China and the U.S. each raised tariffs on each others' goods by $50 billion this summer.

Some media reported in July that BMW had "shifted" production from its Spartanburg County plant to China as a result of the tariffs, but an increase in production in China of the X3 model has been long in the offing, BMW spokesman Kenn Sparks said.

BMW had said in its 2017 annual report last spring that it would start making the smaller SUVs at plants in South Africa and China in the first half of 2018.

"Spartanburg production is not affected by the additional production in China," Sparks said at the time.

Ongoing trade disputes

The U.S. has not yet reached a resolution with China in its trade dispute. At one point, Trump also threatened to impose a 25 percent tariff on the imports of cars and car parts — potentially a huge blow to BMW, which imports engines and transmissions for its Upstate plant from Europe. That proposal remains under review by the U.S. Commerce Department.

"Where was Jeff Duncan and Hank McMaster when they were talking about freedom, standing up to Donald Trump, saying ‘You’re going to hurt our people?’" Robertson, the state Democratic party leader, said Tuesday.

BMWs are ready to be loaded onto a ship for export at the port of Charleston. About $8.76 billion worth of X model vehicles, all assembled at BMW Manufacturing in Spartanburg County, were exported through the port in 2017.(Photo: Provided/BMW Manufacturing)

Robertson was referencing statements made at Duncan's Faith and Freedom barbecue fundraiser at the Civic Center of Anderson, which took place Monday night.

The 3rd Congressional District stretches from Oconee County south almost to North Augusta and then eastward to include part of southern Greenville County.

Robertson said in an interview that BMW is concerned not only about tariffs but also the "stability" of the U.S. government.

Still, BMW's Sparks said BMW has no plans to change its production strategy at the Greer plant, which produces X3, X4, X5 and X6 SUVs.

"Lots of strange things being said these days," Sparks wrote in an email. "At the plant, the only changes are the new X5 is now in production and the big and all-new model, the X7, is only a few months away from start of production."

BMW's growing investment

BMW's plant in Spartanburg County can produce up to 400,000 X-model SUVs annually and last year exported about 270,000 of the 371,000 assembled there. It is BMW's largest plant worldwide and will employ 11,000 by 2021, officials say.

In a conference call with investors and journalists earlier this month, BMW Group Chairman Harald Krüger affirmed the luxury automaker's commitment to its Spartanburg plant as part of a worldwide strategy of localized markets and production.

The company has spent at least $50 million over the past year in a three-year, $600 million expansion of its plant. The larger facility will increase production capacity there from 400,000 to 450,000 X models a year by 2021.

In this Wednesday, March 21, 2018 file photo, the logo of German car manufacturer BMW is pictured at the headquarters in Munich, Germany. German carmaker BMW reports its second quarter earnings on Thursday, Aug. 2, 2018.(Photo: Matthias Schrader, AP)

"We've invested a lot in the U.S.," Krüger said at the time.

When the question came up of relocating production of the X5 — Spartanburg's best-selling model — from the U.S. to China, a company spokesman dismissed the possibility.

"We are not performing any relocations or shifts at the moment. That is definitely not the case no matter in which country or which region of the world," the spokesman said.